Jade Car Loans offers Commercial Hire Purchase (CHP) as a commercial finance products for the purchase of motor vehicles to be used for business purposes. CHP is an effective finance facility for many businesses that utilise a cash accounting method.
As with all major finance decisions and especially in regard to commercial finance arrangements, we advise that you consult with your accountant on whether CHP is the most suitable loan product for your business. Determining which commercial finance product best suits your business involves consideration of your business accounting method, treatment of GST and asset depreciation and tax deductions. On your approval, you are welcome to have your accountant discuss this matter directly with your Jade consultant.
Self-employed individuals, small businesses and large corporations are eligible for CHP when the car is used primarily for business car finance purposes. The car may be new or second-hand. If you’re a tradie buying one vehicle, a small business replacing an existing vehicle or a large company expanding your fleet, contact Jade and one of our consultants will explain how we structure your CHP loan to optimise the benefits to your business.
Commercial Hire Purchase Car Finance: Key Features
A CHP car loan agreement involves the lending company essentially purchasing the motor vehicle on behalf of the borrowing business and for a set monthly hire payment, hiring the car back to the borrowing business. Your business, the borrower, has full use of the car over the term of the CHP agreement while the lender retains ownership in title until all repayments including any balloon payments are finalised.
- Jade structures all motor vehicle CHP agreements on the basis of our low car loans interest rate promise.
- The interest rate is fixed for the term of the CHP agreement.
- CHP is best suited to cash or accrual method of accounting.
- Term of the agreement is fixed. Your Jade consultant will structure the length of the loan to suit your cash flow and financial objectives.
- CHP available on terms from 12 – 84 months.
- Fixed monthly repayment for the full term of the CHP agreement.
- Repayments are not tax deductible. Interest on the loan is tax deductible.
- CHP agreements may include a balloon amount, which is either a fixed dollar amount or percentage of the value of the vehicle. This is fixed and payable after the repayments are finalised.
- GST on the purchase price of the vehicle is claimed by the borrower on their next BAS.
- No GST applies to the monthly repayments, interest or balloon.
- GST applies to any fees and charges and is claimed in the same payment period.
- Depreciation on the car can be claimed according the ATO guidelines.
On finalising all monthly payments and any balloon payment, the lender transfers ownership of the vehicle to the borrower.
Speak with a Jade Car Loans Consultant to discuss a CHP agreement for your business vehicle. Call 1300 000 003